An early step in running out of other people’s money. The Twinkie of today is not the same as the Twinkie I grew up with, so I will not mourn their demise very much. The cake is a shell of its former self, and I always preferred Tastykakes anyway (another company with legacy costs related to unions that very well may drive it out of business).
But if you do like the Twinkie, friends of mine in college did an experiment involving the shelf life of an unwrapped Twinkie, and the results were, shall we say, unnatural. If you go out and buy a few cases now, I’m pretty sure you can still be eating them a decade from now.
Did he do taste tests? Food like that tends to go rancid, since it’s not designed for long shelf life, doesn’t have an oxygen absorber packet, etc.
Maybe he was only testing the sterility of the product and its packaging and its unsuitably as a mold and bacteria growth medium (which is all to the good) … maybe something essential for life is not in them in appreciable quantities (which is why we have a more varied diet :-).
I am impressed by the cluelessness of this union. The Teamsters agreed, and I saw comment from them that the Baker’s Union wasn’t all that engaged in the negotiations and the strike after the obviously best and final offer (due to their being in Chapter 11) was an unwelcome surprise to them.
Trumka, head of the AFL-CIO is blaming Bain et. al. for this failure by an affiliated union (who’s web site is reporting a 509 Bandwidth Limit Exceeded error). Guess blaming Bush is wearing thin.
The good news for consumers is, no bailout for them. So whoever buys the assets can pry them from the grip of the product killers and begin new. To bad that can’t be said for GM…
It’s baffling to blame (per Harold’s post) “capital” for the way the court imposed a contract on the Bakers’ Union, that they rejected.
(As I saw it put elsewhere:
“1) Buy failing company
2) Watch it fail
3) Profit by selling off its assets”
Doesn’t actually work, because you never get to buy it for less than the assets are worth* – and if you could, you’d just immediately sell the assets without waiting for it to fail.
* Because the people who already own it don’t want to take a bath – and they could sell off those assets just as well as you could!)
Actually it does work when it’s allowed; as noted by e.g. James Burnham in The Managerial Revolution the true owners of most big modern corporations are a diffuse group of shareholders and companies are more run for the benefit of their managers (sort of like the public choice school of economics). Michael Milken’s ultimate crime was creating a healthy market for poorly managed companies: with “junk” bonds and other financing a whole bunch of assets were removed from the relatively dead hands of their incumbent management; sometimes the result was a breakup, although the ’60s conglomerate fad had long passed so I don’t think that was the usual outcome.
Of course, this wouldn’t do, so “reforms” in corporate governance made hostile takeovers much harder since that period. And I’m sure that other members of Wall Street noted that just about anyone will fold when the stakes are low and the government is holding guns to the heads of your family, and made suitable political “investments”.
As for failing companies, plenty of the managers of them are entirely happy to ride them all the way down (I’ve watched that a few too many times, Lucent being the last case). That game changes with bankruptcy, of course; pity the Baker’s union leadership didn’t realize that or didn’t care.
Heh, the ultimate result of this will almost certainly be new product untouched by union hands, they might even be able to afford to make a good Twinkie again.
Tastykakes aren’t as good as they used to be either. The TastyKlair used to be an awesome snack, stuffed with Bavarian creme goodness, now it’s often half air inside and over baked….
Disappointing……
The only thing I miss about my time in PA is TastyCakes. I love the chocolate iced chocolate cupcakes. There’s a cheesesteak joint in Phoenix that sells them.
Someone will buy the rights to Twinkies and Hostess cupcakes. This I am sure about.
Sure they will, and then they will start making all the Twinkies and Ding Dongs in Mexico with non-union labor.
Twinkies could stay fresh out of the package for years go through a nuclear war without damage but they could not stand up to a union.
The company had other problems that extended beyond the union. For one, they failed to modernize and make capital improvements years ago when they should have spent the money. It’s better for them to sell the brands and let someone else take over.